The document provides an overview of financial markets in India, including money markets and capital markets. It discusses key concepts such as the primary and secondary markets. In the primary market, companies issue new securities to investors through methods like initial public offerings (IPOs) and rights issues. The secondary market provides a platform for existing securities to be traded among investors on stock exchanges like the National Stock Exchange (NSE) and Bombay Stock Exchange (BSE). Important financial instruments in the money market include treasury bills, commercial paper, certificates of deposit, and call money. The capital market deals in longer term debt and equity. Depositories like NSDL and CDSL hold securities in electronic form to facilitate transactions.

1. Introduction
• Establishment of new business
• Running business
• Modernize
• Expand
• Diversification
• The availability of adequate finance is vital for
the survival and growth of business

2. Introduction
ECONOMIC SYSTEM
HOUSEHOLD SECTOR BUSINESS SECTOR

3. Introduction
• House hold sector , who saves money
• Business sector , who needs money for the
purpose of sale of goods and services
• Financial System acts an intermediary
between savers and investors of money

4. Functions of Financial Markets
• Facilitate the transfer of savings from savers to
investors
• Provides liquidity to financial assets
• Provides pricing information in the market
• Saves time, money and efforts of buyers as
well as sellers

5. Types of Financial Markets
Financial Markets
Money Markets Capital Markets

6. Money Market
• Deals in financial assets with a maturity of less
than one year
• Provides a market for credit instruments like
bills of exchange ,promissory note etc
• Credit instruments are used by Business Units
and other organizations and government

7. Money Market
• The Indian money market consists of RBI,
Commercial Banks, Co-operative Banks,
NBFCs , Financial Institutions like LIC,GIC,UTI
• RBI is regulator of money market in India

8. Money Market Instruments
• Treasury Bills-Promissory Note , Issued by RBI on
behalf of Central Government ,Highly liquid, no risk,
available for minimum amount of Rs. 25000 and in
multiples there of
• Commercial Paper-Short term unsecured instrument
issued in form of promissory note , maturity period-15
days to 1 year ,Issued by large and creditworthy
companies

9. Money Market Instruments
• Call money-Short term finance repayable on
demand and its maturity period varies between one
day to fifteen days
• It is a method by which commercial bank borrow
from each other to maintain the CRR fixed by RBI
• Interest rate is Call Rate and its highly volatile

10. Money Market Instruments
• Certificates of deposits-Short term , Unsecured ,
negotiable instruments issued by commercial banks
to individuals , co-operatives and companies ,
promissory note,maturity period ranges from 91 days
to one year
• Commercial Bills-Short term , negotiable , self-
liquidating instrument which is used to finance
working capital requirements of firms

11. Capital Market
• A market which deals in medium and long-
term funds , both debt and equity
• The market is an institutional arrangement for
borrowing medium and long term funds and
which provide facilities for marketing and
trading of securities
• Capital Market consist of Development banks ,
commercial banks and Stock exchanges and
Individuals

12. Capital Market
Capital
Market
Primary
Market
Secondary
Market

13. Primary Market-Nature
• The primary market is where securities are
created
• It s a arket i which fir sell ew stocks a d
bonds to public for first time
• Company interacts directly with investors

14. Structure Of Primary Market
Primary
Market
Initial Public
Offer
Through
Prospectus
Offer for
sale
Private
Placement
Rights Issue

15. IPO-Through Prospectus
• Most popular method of raising funds by
public companies in the primary market
• Under this method a company issues a
prospectus and invites the general public to
apply for its securities offered
• A prospectus provides details about the
company and proposed issue
• It makes a direct appeal to investors to raise
capital through an advertisement in news
papers and other media

16. IPO-Offer for sale
• Under this method, a company does not issue
securities directly to the public but it sells all
securities to an intermediary, known as Issue
House, at a fixed price
• In terns the intermediary resells the securities
to the investing public at a higher price

17. IPO-Private Placement
• Under private placement method, a company
allots its securities institutional investors and
some selected individuals
• This method enables the company to raise
capital more quickly than a public issue
• A company which can not afford to raise
resources from the public issue , may opt for
this method

18. Rights Issue
• Under this method, a company offers new shares
to its existing shareholders in proportion to the
number of shares they already possess
• The shareholders may either accept the offer for
himself or assign a part or all of his rights to
another
• The company offers these rights to the
shareholder at price below the current market
price

19. IPO-Process(Participants)
• Manager
• Registrar
• Underwriters
• Bankers
• Advertising Agents
• Other Financial Institutions

20. IPO-Process
• The process begins with nominating a
merchant banker or a consortium of
investment bankers represented by one of
them , known a book running lead manager
• BRLM prepares a Draft Red Herring Prospectus
(DRHP) and submits it to SEBI for approval
• The company also hires an authorized IPO
grading Agency to grade the fundamentals of

21. IPO-Process
• After receiving SEBI clearance on the public
issue and approval from stock exchange
,BRLM begins distribution of IPO application
forms through its designed syndicate
managers
• The IPO is open for certain no. of days and
bids are updated with stock exchanges as they
are received (Book-Building Process)

22. IPO-Process
• Once the IPO is closed for public subscription ,in
case of a book building IPO, the company with
help of lead managers and the IPO registrar
decide the issue price(Based on demand)
• Then the registrar does the fair distribution of
shares and publishes a report in the form of
Basis of Allot e t document
• The allocated shares are now deposited in to
demat accounts of the investors and get listed on
designated stock exchanges on the specified IPO
listing date

23. Book Building
• It is a price discovery mechanism
• It is a mechanism where, during the period for
which the book for issue is open , bids are
collected from investors at various prices, which
are above or equal to the floor price
• The offer/issue price is then determined after the
bid closing date based on certain evaluation
criteria
• This process aims at tapping both wholesale and
retail investors

24. Book Building Example
PRICE BID CUMULATIVE BID
85 250000 250000
80 300000 550000
75 450000 1000000
70 650000 1650000
65 555000 2205000
60 665000 2870000
No. of shares to allot-1000000
Price Band-60-85

25. IPO-Limitations
• Accounting and marketing cost
• Ongoing requirement to disclose accounting
and business information
• Public dissemination of information which
may be useful by competitors

26. SECONDARY MARKET-Nature
• Market in which securities already issued by companies
are subsequently traded among investors.
• Continuous trading.
• The secondary market is that market in which the
buying and selling of the previously issued securities is
done.
• The transactions of the secondary market are generally
done through the medium of stock exchange.
• The chief purpose of the secondary market is to create
liquidity in securities.

27. SECONDARY MARKET-Nature
• Under Securities Contract Regulation Act
1956, securities trading is regulated by Central
Government;
• Takes place only in stock exchanges
recognized.
• SEBI, Company Law Board and stock
exchanges regulate secondary market.
www.kanishgeorge.blogspot.in

28. Secondary Market-Functions
• Provides liquidity and marketability of existing
securities
• Determines prices of securities
• Provides information about prices and sales
• Provides safety to dealings and investment
• Contributes to economic growth
• Facilitates better allocation of funds
• Provide scope for speculation

29. Secondary Market-Structure
• First stock exchange in India was BSE in Mumbai
• There were a number of unorganized stock
exchanges that used to function in the country
without any formal set-up were known as kerb
market
• The government of India passed the Security
Contracts(Regulation) Act in 1956 for the
recognition and regulation of stock exchanges in
India

30. Secondary Market-Structure
• There are 23 stock exchanges in India at
present
• Among them most prominent stock exchanges
are NSE,BSE, OTECI

31. Secondary Market-Limitations
• Annual Listing Fee
– Prescribed initial listing fee and annual listing fee on or before April
30 each year.
• Regulations of Stock Exchange
– Agrees to comply with rules, byelaws and regulations now and
hereafter.
• Notice of Board Meetings
– Prior intimation at least seven days in advance.
• Book closure notice
– 42 days advance notice, specifying the purpose.

32. Secondary Market-Limitations
• Submission of reports
– Annual reports, B/S, P&L, and all periodical and special reports
– All notices, resolutions, and circulars relating to new issue
– Notices and call letters of all meetings.
– Proceedings of annual/general body meeting.
– Copies of all notices, circulars etc issued or advertised in the press.
• Publication of periodical interim statements
– In a form approved by exchange.
• Issue of shares
– Offer shares, securities, rights, benefits to subscribe pro rat a basis to
equity share holders, unless approved in General meeting, 4 weeks
time.

33. Secondary Market-Limitations
• Effecting changes in securities
– 21 days prior notice necessary to
make changes and make
application to stock exchange
• Circulation of Annual results
– Supply a copy of B/S, P&L and
directors report to each share
holder and up on application to any
member of the exchange
• Information of events
– Inform about strikes, lockouts both
at occurrence and cessation

34. Secondary Market-Limitations
• Take over conditions
– Take over regulations of SEBI should be fulfilled.
• Unaudited financial results
– Will be published within one month from the end of a
quarter to the stock exchange
• Corporate governance
– Include separate section on corporate governance in
annual reports

35. NSE & BSE
Secondary Market Structure

36. NSE

37. Board of Directors
Mr. Ashok Chawla
Former Secretary, Ministry of Finance
Government of India
Chairman
[Public Interest Director]
Mr. Ravi Narain
Former Managing Director & CEO
National Stock Exchange of India Limited
Vice Chairman
[Shareholder Director]

38. INTRODUCTION
The national stock exchange of India was promoted
by leading financial institution at the order of
government of India and was incorporated in
November 1992 as a tax paying company.
In April 1993,it was recognized as a stock exchange
under the securities contract(Regulation) Act,
1956…NSE commenced operation in June 1994
The capital market segment of the NSE commenced
operation in November 1994 ,while operation in the
derivatives segment in June 2000

39. PURPOSE
• Establishing a National wide trading facility for all
type of securities.
• Ensuring equal access to investor all over the country
through an appropriate communication network.
• Providing for a Fair, efficient and transparent
securities market using electronic Trading system.
• Enabling shorter Settlement cycles.
• Meeting up with international benchmark and
standard

40. Trading schedule
• Trading takes place on all days of the week except
Saturdays & Sundays. The market timings are as follows:
(1) Pre-open session (Regular)
Order entry & modification Open: 09:00 hrs
Order entry & modification Close: 09:08 hrs*
• *with random closure in last one minute. Pre-open order
matching starts immediately after close of pre-open order
entry.
(2) Pre-open Session for IPO and Relist Securities
Order entry & modification Open: 09:00 hrs
Order entry & modification Close: 09:45 hrs*
• *with random closure in last one minute. Pre-open order
matching starts immediately after close of pre-open order
entry.

41. (3) Regular trading session
Normal Market Open: 09:15 hrs
Normal Market Close: 15:30 hrs
(4) The Closing Session is held between 15.40 hrs
and 16.00 hrs.
• The Exchange may also extend, advance or reduce
trading hours when its deems fit and necessary.

42. ADVANTAGES
WIDER ACCESSIBILITY
SCREEN BASED TRADING
NON-DISCLOSURE OF THE TRADING MEMBERS
IDENTITY
TRANSPARENT TRANSACTION
MATCHING OF ORDERS
TRADING IN DEMATERIALISED FORM

43. • Raising capital for businesses
• Mobilizing savings for investment
• Facilitating company growth
• Profit sharing
• Corporate governance
• indicator of the economy

44. Mile Stones
• November 1992 Incorporation
• April 1993 Recognition as a stock exchange
• October 1995 Became largest stock exchange in the
country
• April 1996 Launch of S&P CNX Nifty
• November 1997 Best IT Usage award by Computer
Society of India.
• May 1998 Launch of NSE's Web-site: www.nse.co.in

45. • February 2000 Commencement of Internet Trading
• June 2000 Commencement of Derivatives Trading
(Index Futures)
• January 2002 Launch of Exchange Traded Funds
(ETFs)
• June 2007 NSE launches derivatives on Nifty Junior &
CNX 100.
• August 2008 Launch of Currency Derivatives
• November 2009 Launch of Mutual Fund Service
System
• February 2010 Launch of Currency Futures on
additional currency pairs

46. Markets
Currently, NSE has the following major segments of the capital
market:
• Equity
• Futures and Options
• Retail Debt Market
• Wholesale Debt Market
• Currency futures
• MUTUAL FUND

47. BSE

48. Board of Directors
• Mr. Ashishkumar Chauhan
Managing Director & CEO
Dr. K. Kasturirangan
Public Interest Director
Dr. Sriprakash Kothari
Shareholder Director
Mr. Sethurathnam Ravi
Public Interest Director

49. About
• Original named as “The Native Share & Stock
Brokers Association”
• Established : 1875
• Location : Mumbai
• Work on bid-ask quote
• In 1995 its fully computerized system (screen-based
system)
• In 1996 SEBI permitted BSE to extend its BOLT
network outside of mumbai.

50. • SENSEX is major index of BSE
• SENSEX comprise 30 scripts from different sectors
• .
• Other important indices originating from the Bombay
exchange include the BSE 100, BSE 500, BSEPSU,
BSEMIDCAP, BSESMLCAP.

51. BSE Hours of Operation
• Beginning of the Day Session: 8:00 - 9:00
• Login Session: 9:00 - 9:15
• Trading Session: 9:15 - 15:30
• Position Transfer Session: 15:30 - 15:50
• Closing Session: 15:50 - 16:05
• Option Exercise Session: 16:05 - 16:35
• Margin Session: 16:35 - 16:50
• Query Session: 16:50 - 17:35
• End of Day Session:17:35

52. Various stock exchange in India
• Bombay Stock Exchange (BSE)
• National Stock Exchange of India (NSE)
• Indian Commodity Exchange (ICEX)
• United Stock Exchange of India (USE)
• Multi Commodity Exchange (MCX)
• Over the Counter Exchange of India (OTCEI)
• Inter-connected Stock Exchange of India (ISE)
• Madras Stock Exchange (MSE)
• Ahmedabad Stock Exchange (ASE)
• Bhubaneshwar Stock Exchange (BhSE)

53. • Cochin Stock Exchange (CSE)
• Hyderabad Stock Exchange (HSE)
• Calcutta Stock Exchange (CSE)
• Delhi Stock Exchange (DSE)
• Bangalore Stock Exchange
• Madhya Pradesh Stock Exchange, Indore
• Jaipur Stock Exchange (JSE)
• Magadh Stock Exchange, Patna
• UP Stock Exchange (UPSE)
• Vadodara Stock Exchange,Vadodara (VSE)

54. 17 most valuable stock exchanges
• New York Stock Exchange
• NASDAQ-National Association of Securities
Dealers Automated Quotations
• Japan Exchange Group
• Shanghai Stock Exchange
• London Stock Exchange
• Euronext
• Shenzhen Stock Exchange-China
• Hong Kong Stock Exchange

55. • TMX Group-Canada
• Deutsche Boerse-Germany's
• National Stock Exchange of India
• SIX Swiss Exchange
• Korea Exchange
• Australian Securities Exchange
• NASDAQ Nordic Exchanges
• Johannesburg Stock Exchange

56. TRADING SYSTEM

57. DEPOSITORIES
• A depository is an institution which holds
the shares of an investor in electronic form.
• It facilitates transactions in securities simply
by means of book entry.

58. DEPOSITORIES in
INDIA
There are two main depositories in India:
• CENTRAL DEPOSITORY SERVICE LIMITED
(CDSL)
• NATIONAL SECURITIES DEPOSITORY
LIMITED (NSDL)

59. DEPOSITORY
PARTICIPANTS
• A Depository Participant (DP) is an agent of the
depository. He functions as a mediator between the
issuing company and the investors through the
depository.
• It opens the accounts and maintains the securities
account balance of the investors and conveys them the
status of their holding from time to time.
• As per SEBI guidelines, banks, stock brokers, etc. can
become depository participants.
• Every Depository Participant(DP) needs to be registered
under a Depository before it begins its operation or
trade in the market.

60. TRADINGTrade in stock markets means the transfer for
money of a stock or security from a seller to a
buyer. This requires these two parties to agree
on a price. Equities (Stocks or shares) confer
an ownership interest in a particular company.

61. TRADING PROCESS
Approach a broker or a bank.
Enquire about their DP.
If you feel they are trustworthy, open up a
demat account with them.
You will be provided a username. You can either
ask them to do the trading on your behalf or
have the online trading option enabled for
yourself.
HAPPY TRADING!!!!

62. TRADING
OPTIONS
An investor wanting to trade can invest his
money in the following ways in the markets:
• Equities
• Debentures/ Bonds

63. Trading Of Securities- Debentures/
Bonds
• Debt instruments represent contracts
whereby one party lends money to another on
pre-determined terms with regard to rate of
interest to be paid by the borrower to the
lender, the periodicity of such interest
payment, and the repayment of the principal
amount borrowed

64. Trading Of Securities- Debentures/
Bonds
• In the Indian securities markets, the term
bond is used for debt instruments issued by
the Central and State governments and public
sector organizations, and the term
debentures for instruments issued by private
corporate

65. Trading Of Securities- Debentures/
Bonds
• The market for government securities is the
most dominant part of the debt market in
terms of outstanding securities, market
capitalization, trading volume and number of
participants.

66. Trading Of Securities- Debentures/
Bonds
• The NSE started its trading operations in June
1994 by enabling the Wholesale Debt Market
(WDM) segment of the Exchange.
• This segment provides a trading platform for a
wide range of fixed income securities that
includes Central government securities, treasury
bills (T-bills), state development loans (SDLs),
bonds issued by public sector undertakings
(PSUs), floating rate bonds (FRBs), zero coupon
bonds (ZCBs), index bonds, commercial papers
(CPs), certificates of deposit (CDs), corporate
debentures

67. Trading Of Securities- Debentures/
Bonds
• To further encourage wider participation of all
classes of investors, including the retail
investors, the Retail Debt Market segment
(RDM) was launched on January 16, 2003
• This segment provides for a nationwide,
anonymous, order driven, screen based
trading system in government securities

68. Trading Of Securities- Debentures/
Bonds
• In developed economies, bond markets tend
to be bigger in size than the equity market. In
India however, corporate bond market is quite
small compared to the size of the equity
market.
• Banks, financial institutions, mutual funds,
provident funds, insurance companies and
corporate are the main investors in debt
markets.

69. Trading Of Securities- Equity
• Equity implies ownership rights in the
corporate entity that has issued the
instruments to the public
• Primary Market and Secondary Market

70. Security trading-Types of orders
• Basically the trader can use two types of
orders
a) Market order
b) Limit order

71. Market Order
• Market orders are a buy or sell order in which the
trader execute the order at the best price
currently available
• For example -
If trader wants to buy 50 shares of company
Jindal steel and power and trader put in a market
order for 50 shares and hit the execute button.
The stock order will automatically be matched up
with the stocks current market price (trading at
that particular time) and executed.

72. Market Order
• Market orders are a buy or sell order in which
the trader execute the order at the best price
currently available
• For example -
If trader wants to buy 50 shares of company
Jindal steel and power and trader put in a
market order for 50 shares and hit the execute
button. The stock order will automatically be
matched up with the stocks current market
price (trading at that particular time) and
executed

73. • Advantage of Market order
• a) No wait time, the order will be executed
immediately with the current market price.
b) It is 100% confirmed that the order will be
executed and will not remain in pending order.

74. • Disadvantages of Market Order
• a) It is not sure at which price the order will be
executed.
b) If you are seeing the current market price for
your stock at Rs 250 and if you hit the execute
button and suddenly if the stock price increases
to Rs 255 then there is probability that your order
will get executed at Rs 255 and not at
Rs 250.

75. Limit Order
• A limit order is an order placed to buy shares at
or below a specified price or to sell it at or above
a specified price (called the limit price).
For example
If trader wants to buy 100 shares of DLF at Rs 250
a share then the trader will place the limit order
for Rs 250 and once the market price of a share
reached at Rs 250 then the order will be executed
automatically.
Limit orders can be used in both the buying and
selling of stock.

76. • Advantage of Limit order
a)The trader or investor will be sure the price at
which the order will be executed.
If the trader puts Rs 100 as buy or sell order then
the order will executed at this price only.
b)Disadvantage of Limit order
a) It is not sure that the order will get executed at
the specified price because the share price has to
come to that limit price to get executed. So the
order may remain pending if in case the price
doesn t come to the specified limit price.

77. Stop loss order
• The stop loss orders are used to reduce losses
if in case the market turns against your trade
and starts moving other side.

78. Margin Trading
• You can buy shares on margin
• This means that you provide a portion of
purchase value as margin and the rest is given
by broker as a loan to you
• For example if you have a margin account with
kotaksecurities.com, you can get loan up to
75% of purchase value
• So if your margin account has balance of Rs.
25000,you can buy shares up to Rs. 100000

79. Margin Trading
• Initial Margin
• Maintenance Margin

80. CLEARING AND SETTLEMEMT

81. Introduction
• The transactions in secondary market pass through
three distinct phases, viz., trading, clearing and
settlement.
• While the stock exchanges provide the platform for
trading, the clearing corporation determines the
funds and securities obligations of the trading
members and ensures that the trade is settled
through exchange of obligations.

82. CLEARING AND SETTLEMEMT
• The clearing banks and the depositories
provide the necessary interface between the
custodians/clearing members for settlement
of funds and securities obligations of trading
members.

83. Clearing Corporation
• The first clearing corporation to be established in the
country and also the first clearing corporation in the
country to introduce settlement guarantee is the
National Securities Clearing Corporation Ltd. (NSCCL),
a wholly owned subsidiary of NSE.

84. Clearing Corporation
• NSCCL was incorporated in August 1995. It
was set up with the objectives of bringing and
sustaining confidence in clearing and
settlement of securities; promoting and
maintaining short and consistent settlement
cycles; providing counter-party risk guarantee,
and operating a tight risk containment system.

85. Custodians
• Custodians are clearing members but not trading
members. They settle trades on behalf of trading
members, when a particular trade is assigned to
them for settlement.
• The custodian is required to confirm whether he is
going to settle that trade or not. If he confirms to
settle that trade, then clearing corporation assigns
that particular obligation to him.

86. Custodians
• As on date, there are 13 custodians empanelled
with NSCCL. They are Deutsche Bank A.G., HDFC
Bank Ltd., Hongkong Shanghai Banking
Corporation Ltd., Infrastructure leasing and
Financial Services Ltd., ICICI Bank Ltd., Standard
Chartered Bank Ltd., Stock Holding Corporation of
India Ltd. , Axis Bank Ltd., DBS bank Ltd., JP
Morgan Chase Bank N.A., Kotak Mahindra Bank
Ltd. State Bank of India and Citibank N.A and
Orbis Financial Corporation Ltd.

87. Clearing Banks
• Clearing banks are a key link between the
clearing members and Clearing Corporation to
effect settlement of funds.
• Every clearing member is required to open a
dedicated clearing account with one of the
designated clearing banks. Based on the clearing
member’s obligation as determined through
clearing, the clearing member makes funds
available in the clearing account for the pay-in
and receives funds in case of a pay-out

88. Clearing Banks
• There are 13 clearing banks of NSE, viz., Axis
Bank Ltd, Bank of India Ltd., Canara Bank Ltd.,
Citibank N.A, HSBC Ltd., HDFC Bank Ltd., ICICI
Bank Ltd IDBI Bank Ltd., Indusind Bank Ltd.,
Kotak Mahindra Bank, Standard Chartered
Bank, State Bank of India and Union Bank of
India

89. Depositories
• Depository holds securities in dematerialized
form for the investors in their beneficiary
accounts. Each clearing member is required to
maintain a clearing pool account with the
depositories. He is required to make available
the required securities in the designated
account on settlement day

90. Depositories
• The depository runs an electronic file to transfer
the securities from accounts of the
custodians/clearing member to that of NSCCL and
visa-versa as per the schedule of allocation of
securities. The two depositories in India are the
National Securities Depository Ltd (NSDL) and
Central Depository Services (India) Ltd (CDSL).

91. Clearing & Settlement Process
• The clearing process involves determination
of what counter-parties owe, and which
counter-parties are due to receive on the
settlement date, thereafter the obligations are
discharged by settlement. The clearing and
settlement process comprises of three main
activities- clearing, settlement and risk
management.

92. The core processes involved in
clearing and settlement include
• Trade Recording
• Trade Confirmation
• Determination of Obligation
• Pay-in of Funds and Securities
• Pay-out of Funds and Securities

93. Settlement Cycle
• NSCCL clears and settles trades as per the well-
defined settlement cycles. All the securities are
being traded and settled under T+2 rolling
settlement. The NSCCL notifies the relevant trade
details to clearing members/custodians on the
trade day (T), which are affirmed on T+1 to
NSCCL. Based on it, NSCCL nets the positions of
counterparties to determine their obligations. A
clearing member has to pay-in/pay-out funds
and/or securities.

94. SEBI – ROLE AND
FUNCTIONS

95. • Securities & Exchange Board of India (SEBI) formed
under the SEBI Act, 1992 with the prime objective of
– Protecting the interests of investors in securities
market
– Promoting the development of securities market
– Regulating, the securities market and for matters
connected therewith or incidental thereto.
Focus being the greater investor protection, SEBI has
become a vigilant watchdog
Mission of SEBI

96. Functions of SEBI
• Regulating the business in stock exchanges
and any other securities market
• Registering and regulating the working of
stock brokers , sub-brokers, share transfer
agents , bankers to the issue , registrars to an
issue , merchant bankers, underwriters,
portfolio managers , investment advisors

97. Functions of SEBI
• Registering and regulating the working of
collective investment schemes including
mutual funds
• Prohibiting fraudulent and unfair trade
practices in the securities market
• Promoting investors’ education and training of
intermediaries in securities market
• Prohibiting insiders trading in securities

98. Functions of SEBI
• Regulating substantial acquisition of shares
and take over of companies
• Calling for information , undertaking
inspection , conducting enquiries and audits
of the stock exchanges , intermediaries and
self-regulatory organizations in securities
market

99. • Chairman
• Two members from among the officials of the
Ministries of central government dealing with
finance and law
• One member from officials of RBI
• Two other members to be appointed by
central government
Organization of SEBI-Management of
the board

100. Organization of SEBI-Departments
Department Responsibility
Primary Policy matters related to primary market, intermediaries
and self regulatory organizations ,redressal of investors’
grievances and guidance
Issue
management and
intermediaries
Department
Registration , regulation and monitoring of the
intermediaries and scrutiny of offer document
Secondary Market
Department
Policy matters related to major stock exchanges , price
monitoring market surveillance , prevention of insider
trading and brokers’ registration
Institutional
Investment
Mutual Fund , FIIs, mergers, acquisitions

101. SEBI’s Role In Primary Market
• Entry Norms
• Promoter’s Contribution
• Disclosure
• Book Building
• Allocation Of Shares
• Market Intermediaries

102. SEBI’s Role In Secondary Market
• Governing Board
• Infrastructure
• Settlement and Clearing
• Debt Market Segment
• Price Stabilization
• Delisting
• Brokers and SEBI
• Insider Trading

103. • Office of investors assistance and education
• Launching of complaint redressal mechanism
• Displaying names of defaulting companies on SEBI
website
• Framing comprehensive rules for administration of
the investors protection and education funds
• Establishing a separate investment awareness
division
• Reaching out to the masses through investors
associations and NGOS
SEBI guidelines regarding Investors
Protection

104. • Conducting financial literacy programmes for
school and college students
• Establishing NISM
SEBI guidelines regarding Investors
Protection

105. INVESTMENT Vs SPECULATION
INVESTOR SPECULATOR
Planning Horizon Long Short
Risk Disposition Moderate High
Return
Expectation
Moderate High
Basis for Decisions Fundamental Factors and careful
evaluation of firm
Technical Charts , Market
Psychology
Leverage Investors use own funds Resorts to borrowing

106. Types of investors
• Regular Investors-long term equity
• Only savers-FD,RD,PPF
• Seasonal Traders-Close to investment
professionals
• Risk Taker-Never Panic , Work against herd
mentality

107. Approaches of Security Analysis
• Fundamental Approach
• Technical Approach
• Psychological Approach

108. Common Errors in Investment
Management
• Inadequate comprehension of return and risk
• Vaguely formulated Investment Policy
• Untimely Entries and Exit
• High Cost
• Over Diversification and Under-Diversification
• Wrong attitude toward losses and profits